Correlation Between Societatea Nationala and LACTATE NATURA

Can any of the company-specific risk be diversified away by investing in both Societatea Nationala and LACTATE NATURA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Societatea Nationala and LACTATE NATURA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Societatea Nationala de and LACTATE NATURA SA, you can compare the effects of market volatilities on Societatea Nationala and LACTATE NATURA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Societatea Nationala with a short position of LACTATE NATURA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societatea Nationala and LACTATE NATURA.

Diversification Opportunities for Societatea Nationala and LACTATE NATURA

0.0

Correlation Coefficient

Societatea Nationala  LACTATE NATURA

Pay attention - limited upside

The 3 months correlation between Societatea and LACTATE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Societatea Nationala de and LACTATE NATURA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LACTATE NATURA SA and Societatea Nationala is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Societatea Nationala de are associated (or correlated) with LACTATE NATURA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LACTATE NATURA SA has no effect on the direction of Societatea Nationala i.e., Societatea Nationala and LACTATE NATURA go up and down completely randomly.

Pair Corralation between Societatea Nationala and LACTATE NATURA

If you would invest (100.00) in LACTATE NATURA SA on October 25, 2024 and sell it today you would earn a total of  100.00  from holding LACTATE NATURA SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Societatea Nationala de  vs.  LACTATE NATURA SA

Societatea Nationala

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Societatea Nationala de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Societatea Nationala is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

LACTATE NATURA SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LACTATE NATURA SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, LACTATE NATURA is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Societatea Nationala and LACTATE NATURA

The main advantage of trading using opposite Societatea Nationala and LACTATE NATURA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societatea Nationala position performs unexpectedly, LACTATE NATURA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in LACTATE NATURA will offset losses from the drop in LACTATE NATURA's long position.

The idea behind Societatea Nationala de and LACTATE NATURA SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.